Panel declares financial emergency for Pontiac School District

Aug. 2, 2013

Written by

Detroit Free Press Education Writer

The Pontiac School District is in a state of financial emergency, according to a review team that has spent the last few weeks studying the district’s finances.

The review team made the declaration today. Gov. Rick Snyder has 10 days to determine whether he agrees with the finding.

If Snyder also declares a financial emergency, it could lead to drastic options, including bankruptcy, the appointment of an emergency manager, a consent agreement or a neutral evaluation process.

District and board leaders could not be reached for comment. Aimee McKeever, president of the Pontiac Education Association, said the review team is correct in declaring a financial emergency in the district.

But she said the district can’t wait until a formal declaration by the governor.

“We need the state to step up now,” said McKeever, who said she believes a loan will be necessary in order for the district to open schools for the new school year in September.

Caroll Turpin, president of the Pontiac Board of Education, said the declaration of a financial emergency was expected. If the governor agrees, she said, “the board will be discussing what our next steps should be.” She said that while the district is indeed applying for a loan, it won’t impact the opening of the school year.

“We have challenges, and we’ve had setbacks,” Turpin said. “But we are all working together in the district to make sure that school opens in September and that we’re able to educate our students.”

The review team’s conclusion came after meetings with district administrators, union representatives and others with knowledge of the district’s financial condition. At a July 17 meeting, many residents urged the state to move quickly in helping resolve the financial crisis in the district:

■ The district’s deficit has quadrupled since 2009. At the end of the 2012-13 school year, the deficit was at $37.7 million.

■ The district has about $33 million in unpaid bills to vendors.

■ District staff members appear to have violated state law by using debt retirement funds to cover payroll.

■ The district is facing an $8-million civil judgment for failure to pay insurance premiums to the Michigan Education Special Services Association (MESSA).

■ On May 1, the district defaulted on a $1.4-million debt service payment.

McKeever said the district has been hit hard by cuts in per-pupil funding in recent years. Past mismanagement by previous administrators and a revolving door of superintendents are also factors. McKeever said she’s worked with five different superintendents since she became president of the association in 2011.